USD/JPY Nears 145 JPY, U.S. Inflation Rate Exceeds Expectations and Accelerates【January 12, 2024】

January 12, 2024

Markets Analysis

Fundamental Analysis

  • U.S. CPI exceeds market expectations, indicating accelerated inflation.
  • Expectations for a U.S. rate cut recede; a March rate cut seems challenging.
  • USD/JPY rises, but momentum slows in the latter part of NY trading hours.

USDJPY Technical Analysis

Analysis of USD/JPY’s daily chart. After breaking above the 200-day moving average, it fell post-CPI announcement but this average is acting as a support line. Support levels are at 144.50 JPY, the 38.2% Fibonacci line, and the 200-day moving average. Resistance is seen at the 50% Fibonacci retracement line.
The current situation is at a crossroads, deciding whether it is forming a recovery high or continuing an upward trend. RSI is hovering around 50%, indicating unclear market direction. The focus now is on whether the 50% Fibonacci retracement line will be retested and surpassed.


Day Trading Strategy (1-Hour Chart)

Analysis of the USD/JPY 1-hour chart. The 90 moving average line acts as a support, with the price rising to 146.40 JPY post-CPI announcement before slowing down. Falling below this moving average line could lead to further decline.
RSI is below 50, at 46, indicating a downtrend. No significant growth is seen after hitting a high, suggesting a potential pullback. The 200-day moving average on the daily chart is around 146.18 JPY; falling below this could lead to further declines. However, it’s too early to adopt a selling strategy.
The day trading strategy is to buy on dips, with a buy entry at 144.55 JPY, a take-profit at 145.30 JPY, and a stop-loss at 144.20 JPY.

Support and Resistance Lines

Upcoming significant support and resistance lines:

144.70 JPY: 38.2% Fibonacci line on the daily chart.
144.44 JPY: Support line on the monthly chart.


Market Sentiment

USDJPY Sell: 57%, Buy: 43%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
UK Gross Domestic Product (GDP)16:00
U.S. Producer Price Index22:30

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.

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